Despite Illegal Status, Buyers Get Home Loans

Each week, Pedro Morlet knocks on doors in the Bay Area, looking for illegal immigrants.

Morlet isn't an immigration agent. He's a real estate agent, and he's scouting for business.

"Do you want a house, work and pay taxes but don't have a Social Security number?" reads his flier, written in Spanish and tailored to his potential customers. "We can help you LEGALLY!"

Across the country, particularly in Texas and parts of the Midwest, hundreds of illegal immigrants have bought homes using special lending programs that bypass the need for a Social Security number. Now, with backing from some of the country's largest financial institutions, this newest effort to tap customers for the real estate market is moving to the nation's largest concentration of illegal immigrants -- California.

As buyers begin to queue up, real estate is becoming the latest arena to highlight the often-bizarre contradictions of American immigration policy.

Advocates of tighter controls on immigration oppose the idea of illegal residents buying homes here. Lending money to illegal immigrants encourages others to cross the border, they say.

"They have no right to own property in the United States because they have no right to be here in the first place," said Diana Hull, president of Californians for Population Stabilization.

Legally, that's not quite true. Unlike some countries -- Mexico, for example -- the United States generally does not restrict foreign citizens from buying real estate.

But for years, because qualifying for a mortgage required a Social Security number, the only way for an illegal immigrant to do so was by using a false number. In addition, such immigrants often were rejected or overlooked by legitimate lenders, leaving them vulnerable to fraud.

Lenders have a powerful incentive to find ways to get around those barriers: tens of thousands of potential customers. The National Assn. of Hispanic Real Estate Professionals estimates that more than 216,000 undocumented immigrants, including many who have been in the country for decades, could buy homes if they had better access to the market.

Despite their undocumented status, many prospective buyers earn steady incomes, face little risk of deportation and are desperate to become homeowners. Their purchases would amount to millions of dollars in mortgages.